'Use callouts to verify' vs 'Verify the existence of email senders.'

I am trying to troubleshoot some problems sending mail from one of our WHM/cPanel 11 servers to another WHM/cPanel 11 server. Both servers have the "** Verify the existence of email senders." option enabled. I can successfully send an email from brad@server1.com to brad@server2.com, but i can not send an email from brad@server2.com to brad@server1.com, i get the sender verify failed response. First we thought it was because of an incorrect rDNS, but we fixed that, and it still fails.

I noticed there are two different options in the exim configuration editor:

"Use callouts to verify the existence of email senders. Basiclly, exim will connect to the mail exchanger for a given address to make sure it exists before accepting mail from it." which is disabled on both servers.

"** Verify the existence of email senders." which is enabled on both servers.

What is the difference and which one should I be using? Any ideas why sender verification would be failing?

I figured out why Server1 was rejecting mail from brad@server2.com. In the past, the server2.com domain was hosted on Server1. When I moved the Server2 domain to Server2, I left the account on Server1. So when Server1 was attempting to verify the existence of brad@server2.com, it recognized server2.com as a local account, and checked for brad@server2.com locally, which does not exist. I deleted the server2.com account from server1, and it works.

I am still curious what the difference between those two settings in the exim configuration editor is. Does anybody know?